Theatre Operators/Movie Exhibitors (Exhibitors) have historically been totally dependent on the content they receive from the Movie Studios—good product, great year for the Exhibitors, bad product and Exhibitors suffer. With little ability to influence the quality of Studio product, the Exhibitors have been constantly searching for ways to consistently fill their seats (cinema resources), a large portion of which experience low utilization, especially during the work week. Alternative Programming events (non-movie content) have had limited success, as they are handicapped by programming inconsistency, fragmented audiences and challenges in advertising and communicating the pre-selected events. As a consequence the Exhibitors continue to suffer from under-utilized screen capacity, forever dependent on movie hits that can run long enough for them to get a profitable share of receipts. On top of it all, the movie product cycle is being more aggressively managed by the Studios each year, with ever shorter Theatre exclusive engagements and alternative content distribution methods constantly experimented with the Studios, all of which contribute to increased business stress for the Exhibitors.
While movie going is still a strong social and cultural activity for most consumers (users), the evolution of in-home Entertainment alternatives continues to compete for both their time and discretionary dollars. TV content, Cable HD distribution, and the interactivity of the Internet are becoming bigger competitive factors for the Exhibitors. Culturally and technologically, we are also witnessing more fragmentation of the market into ‘similar interests groups’, as the boom in Social Networking is affecting the consumer market; this is especially true in the case of the desirable, younger demographics. Trying to address some of these special content needs is quite challenging for the Exhibitors, as the inefficiencies of pre-selected, pre-scheduled events and content creates unpredictable attendance and operating results.
The Exhibitor's biggest asset is the atmosphere of the experience in the theatre, made up by superior visual, sound and setting components, where a user is part of a large group sharing the event.